Many large software sales require that the vendor provide a proposal, often in the form of a response to a formal RFP. Despite this, many software sales reps (and managers, too) have little idea of what makes a software sales proposal effective.

First, let’s clear up a misconception. From the perspective of an IT manager, the primary purpose of a software sales proposal is NOT to provide information needed so that they can make an informed decision. The primary purpose is to eliminate vendors who don’t understand their problems or thus can’t propose a viable solution.

In other words, a software sales proposal is a sales tool, not a technical manual. It must make a persuasive case that leads to a sale. To do this, the software sales proposal must answer the four key questions that customers will ask as they go through the stack of proposals. If your proposal answers these questions correctly, you’ve got a good chance of making the sale. Here are the questions:

Question 1: Do I Know You? The IT manager who has a stack of proposals to review often begins by separating proposals into two groups: 1) those that are worth looking at in detail, and 2) those that can be discarded right away. One of the easiest ways to determine which proposals to keep and which to reject is recognition. Proposals from unknown vendors are not likely to make it beyond the initial sorting. Therefore, if you haven’t laid groundwork with the IT manager through frequent contact, your proposal is likely to be scuttled.

Question 2: Is It Compliant? At the next stage of review, the IT manager will look for basic compliance with the proposal. IT managers tend to be technical types who interpret things literally. Proposals that demonstrate (in the executive summary) that the proposal meets the customer’s key requirements will be kept for the next round of review. Proposals that are obviously noncompliant or that did not follow the instructions for the proposal will be eliminated.

Question 3: Does It Make Sense? The proposals that are left at this point are all fairly competitive and the IT manager must apply more sophisticated criteria to choose. At this point, the IT manager will ask whether or not the proposed software solution makes sense in the context of the business situation being addressed. Does the vendor understand what the issues are? Does the vendor understand the customer’s business? Has the vendor linked the proposed solution to the specific goals that the customer wants to achieve? Does the proposal present sufficient evidence to prove that the vendor is credible – that is, that this company can deliver a successful solution on time and on budget? Finally, can the vendor support the solution once it’s been implemented?

Question 4: Does It Provide Value? Based in part on pre-proposal positioning that occurs during the sales process, on the business case presented in the executive summary, and on the detailed contents of the proposal, IT managers will assess the persuasive case that each of the surviving vendors have built. At this point, all of the remaining proposals meet the criteria and match the customer’s basic expectations, so the IT manager is looking at them in terms of which proposal offers the greatest value. The vendor who offers the most compelling value proposition will almost always win.

This above is largely based on a conversation with Tom Sant, the author of Persuasive Business Proposals (Amacom, 1992; second edition 2004).